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THE NEOPHYTE AND THE LIQUOR MONOPOLY

Listing our first wine at Vintages was not without some difficulty, but the 2004 Notturno Barbera d’Asti Superiore from Piedmont, Italy, was worth the wait.

Having launched our wine club, we hoped that we could get a listing for one of our wines at the Liquor Control Board of Ontario (LCBO). Who was it who once said, “Be careful what you wish for, lest it come true?”

We brought our Arthur’s Cellar Wine Club to life 10 years ago. Once this had been accomplished, we decided that it was time to try our luck at getting Vintages, the LCBO’s fine wines and premium spirits division, to carry some of the wines we had come to represent. After all, that was the way to make real money in the wine business and making real money was something to which we definitely aspired.

We determined that the key to obtaining listings (wine on LCBO shelves) was to enrol in the LCBO’s New Item Submission System (NISS) which outlined the types of wines and other spirits that the LCBO wanted and provided a means to make written submissions in response. The first request we happened upon asked for Italian red wines from the Piedmont area retailing for between $15 and $22. We just happened to have had two wineries that fit the bill perfectly. This was entirely by accident.

Lionello Rosso, Hélène and Carlo Ferro

You see, we had originally intended to represent only small family-owned wineries from France. However, two Italian wineries asked for meetings when we attended a wine show in Cannes. “No way,” I said to Hélène. “Remember the business plan!” But Hélène, who had been assiduously studying Italian for the past two years, insisted it would be a dandy way to practice her newly acquired language skills. I relented. “Just a social visit, mind, we don’t know anything about Italian wines.” So, late one morning after having already tasted 50 other wines (not as much fun as it might sound) we met with Lionello Rosso of Poderi Rosso Giovanni and Carlo Ferro of Azienda Agricola Ferro Carlo, two young and arguably handsome winemakers from Piedmont. Italian quickly filled the air like pollen in spring! Soon the 20 minutes allotted for our meeting were up and as we teetered off to our next session Hélène said: “We have to sign up these two.” “But Hélène,” I noted wryly, “we didn’t taste their wine!”

Three days later we met again with Carlo and Lionello at another wine show in Montpellier. I was determined to try their wines. As Hélène performed more linguistic gymnastics, I happily tasted away and came to the conclusion that they both made very good wine. Perhaps we could make just two exceptions to our business plan?

Let us return to the NISS submission. There were four pages to complete. They asked for such essential information as the weight of the cork, the colour of the bottle, the winery’s fax number and so on. But the question that really stumped me was how many bottles we were going to offer? Surely that was something that Vintages would specify, so I called the assistant manager of Vintages European Wines for clarification. After a brief preamble of niceties that included explaining that this was our first submission, I asked how many bottles they would like (thinking that if too many for our small, limited production wineries we would save everyone the time and effort by not responding). “I won’t tell you,” he responded. “Why not,” I replied in utter astonishment? “Because, that would be unethical,” he imperialistically proclaimed. It was painfully obvious that quantity was somehow part of the tendering process, so in consultation with Lionello and Carlo we decided on 1,800 bottles of each brand. Shortly thereafter I received a note from the head of Vintages European Wines instructing me to stop harassing his employees! Goodness gracious. I responded by helpfully suggesting that they might consider appointing someone to assist neophytic agents, but did not receive a reply.

To our complete astonishment, Vintages accepted Carlo’s 2004 Notturno Barbera d’Asti Superiore for the next stage in the selection process — tasting! The only minor catch was that we had to get them a bottle to taste. But, all the bottles were in Italy. We discovered to our chagrin that the only way to get a bottle was to have it sent to us by air. This cost Carlo more than the equivalent of $100 air freight and then we had to rescue it from Canada Customs where another $125 was extracted from us for duty and all of the LCBO’s markups. But, we did get a bottle of the Notturno to the Vintages tasting panel on time. And then we waited.

Carlo Ferro

A few weeks later we received an email from the LCBO announcing that Carlo’s Notturno had been accepted by Vintages. “Yes,” I shouted. “Oh no,” Hélène responded. “We’re on our way to vast riches,” I said, somewhat nonplussed, “How could you go, oh no?” “Carlo doesn’t speak a word of English and my Italian isn’t nearly good enough to help him wade through all of the LCBO’s technical requirements,” she moaned. I gently reminded her that it was she who insisted that we represent these Italian wineries and noted that Lionello, who spoke passable English, would no doubt be willing to assist in the process.

Then we noticed an attachment to the LCBO’s email. We opened it to find the Letter of Commitment, an imposing document that set out a litany of terms and conditions in respect to their purchase. Most were straight forward. However, buried in their midst was what I have come to call the dreaded Claw-back Clause which decreed that the winery must pay the LCBO 20 per cent of the total original cost of all bottles not sold after having resided 90 days on their shelves. The charge would be waived if 75 per cent of the total order had been sold before the 90 days were up. Somehow Hélène got Carlo to agree to all the conditions including the claw-back clause and we were on our way.

Let me tell you a little about Carlo and his wine. The Ferro Carlo estate is comprised of 10 hectares of vineyards in the borough of Agliano Terme, set between the Langhe and Monferrato districts in Piedmont (north-west corner of Italy). The third generation family-run winery grows Barbera, Dolcetto, Nebbiolo, Cabernet Sauvignon and Grignolino grapes in its meticulously maintained, south facing vineyards that are 300 metres above sea level. Burton Anderson, an internationally acclaimed Italian wine authority who has lived in Tuscany for 35 years wrote this about Barbera d’Asti in his book, Wines of Italy: “Barbera d’Asti — The best wines are robust and full-bodied, with good acidity and are fuller and livelier then Barbera d’Alba. At its best Barbera d’Asti is hard to beat. Most is drunk fairly young. Also makes fruity novello. Some producers’ rich, structured wines will age a decade or more, though styles vary greatly in this vast zone of abundant production.”

Here’s how we introduced Carlo’s 2004 Notturno to our wine club:

2004 Notturno Barbera d’Asti Superiore – (14.5% Alc./Vol.) $19.95 We are thrilled to introduce you to our first wine to be carried by the LCBO’s specialty wine and spirits division, Vintages. It will be available in selected outlets on June 23, 2007 – product # 026088. We won’t go into the epic struggle that resulted in the listing; it would fill at least a chapter in a contemplated book about our vinous travails. Suffice it to say that two years of intensive Italian lessons do not adequately prepare one to translate 100 or so pages of LCBO rules and regulations! Believe me it is hard enough in English.

Here is what the Vintages panel said about Notturno when they tried it in April, 2006: “Deep ruby colour with attractive aromas of plum, black cherry, smoke, tar and blueberry. It is dry, substantially fruity and is surrounded by a crisp/tangy core. Try this medium-bodied wine tonight with a truffle-infused pasta dish or put it in a cellar for 1-3 years.”

I noted that this was a very apt description and that it would also go well with almost any pasta dish, grilled meats and charcuterie (it was terrific with Carlo’s homemade salami). I recommended decanting it at least an hour before drinking and I believed it would mature beautifully in the cellar for at least five to seven years (and it did). Here is some more information about the wine. The yield was a stingy 35 hectolitres per hectare. It was vinified and kept in steel tanks for the first six months before being transferred to large oak barrels where it matured for another year. 2004 was a very good to excellent vintage in Piedmont.

Neatly stocked shelves at Vintages

It was more than a year from the time the LCBO accepted Carlo’s wine and it finally appeared on the shelves in the Vintages stores. During that time our experiences with the senior folks at Vintages were not very enjoyable (or profitable). Soon after they accepted Notturno, I received a message from the head of Vintages European Wines informing us that they could not reconcile our quoted price of $17.95 for a bottle of the wine. After a little deliberation it turned out that we had used an incorrect and too low factor for the shipping costs. The LCBO had provided us with a pricing model (but no instructions for its use) that included a shipping cost amount. In that it is the LCBO that negotiates these rates with the foreign shippers and that we have absolutely nothing to do with it, I had assumed that the cost for shipping that they put in their model was correct. Well, it wasn’t. It turns out that I should have consulted their shipping rate list (that I didn’t know existed) and put the amount for northern Italy into the model. Not only was the number I used too low, but the LCBO marks up shipping costs by more than 70 per cent in order to arrive at the final price. The head of Vintages European Wines went on to say that unless we brought the price back to $17.95 they would not be interested in the product. We were tempted to cancel the offer but decided that wouldn’t be fair to Carlo. Accordingly, we eliminated almost all our commission to arrive at a retail price of $17.95. An expensive lesson well learned. But, how about this? When Vintages finally released the product many months later, they did so at $19.95! Most of the Notturno was sold at this price with the remainder going for $18.80 (thanks in part to the marketing efforts we made at the Vintages stores and promoting it to our wine club members). The claw-back provision was not invoked, for which we were most grateful.

After signing the Vintages Letter of Commitment and waiting many months, Carlo asked us when he might expect to receive a Vintages purchase order for the 1,800 bottles he was holding on reserve. Being our first order and finding no information about the timing of order documentation on the LCBO websites, we asked the head of Vintages European Wines when the purchase order would be issued. His answer was, “My assistant will reply to you when and if she has the time”. Gasp! Fortunately the assistant found 30 seconds a few days later to let us and Carlo know.

Thus ends the tale of our initial encounters with Vintages. There would be more to come. Surely we could expect our business relationship to improve. But, I’ll save all that for another day and treat you instead to a much more uplifting story in my next post about the marvellous Châteauneuf du Pape house, Domaine Roger Sabon and its remarkable mentor, Jean-Jacques Sabon.

Till then, “Cheers!”

Featured image: Agliano Terme, Piedmont, Italy, home of the Ferro Carlo estate

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Another marvellous chapter from what I hope will be a forthcoming book. I do hope someone from the LCBO is reading these chapters if only to confirm that their pompous and anti-tax payer business model is working.